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startup | IST

Chennai agro-tech start-up Waycool to target IPO by 2025

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In the run up to going public, the company hopes to raise between Rs 800 and 1,000 crore in its next round of funding over the next 24 months, co-founder and CEO Karthik Jayaraman said.

Chennai-based agro-tech and food start-up, Waycool, has said it hopes to go public by May 2025, as part of a medium-term fund-raising strategy. In the run up to going public, the company hopes to raise between Rs 800 and 1,000 crore in its next round of funding over the next 24 months, co-founder and CEO Karthik Jayaraman, told CNBC-TV18 in an exclusive chat.
"We will require the deployment of Rs 800 to 1,000 crore over the next 24 to 36 months in various investments — we will invest heavily in technology and automation and in building 35 warehouses — after the next round of funding," said Karthik, "Our product development and marketing activities will also attract investments, even as we look to acquire companies who complement our work and bring value to our investments."
Four-fold increase in revenues since March 2020
The announcement from Waycool comes as the company has had a dream over the last 18 months, utilizing back-to-back COVID-19 lockdowns to shore up its automation, warehouse strength and sourcing centres.
Since March 2020, the company has increased its tonnage by 3.5 times — from 250 tonne per day to 900 tonne per day — and has charted a four-fold spike in revenues. "Our revenues were between Rs 20 and 22 crore per month in March last year; they are over Rs 80 crore today," said Karthik, "We are on target to hitting Rs 1,000 crore in revenue for FY 22."
Focusing on delivering fresh produce and packaged foods to Kirana stores at the height of the lockdown, the start-up said it was able to “service a large percentage” of their requirements. "We ensured that we kept expanding capacity and delivering quantities," said Karthik, "We have, in doing that, managed to triple throughput at warehouses even without physically expanding our space."
While embarking on this operation, Waycool heavily automated its own warehouses. A line of robotic arms, conveyor belts and computerised sorting of produce is the standout feature at one of the company’s key warehouses in Chennai. The automation has seeped into the start-ups daily operations and interactions with stores as well. “All orders are being processed by robots and this has led to an increase in efficiency," said Karthik.
'Foraying into value-added food products'
Over the last year or so, Waycool has made a strategic move from being a supplier of fresh produce to what Karthik calls a “full-service broad-line player” in the food and agro-tech space. "More than 50 percent of our volumes are from grains, staples, milk and packaged food," he said, “We are also looking to foray into the meat and value-added segments."
These segments largely include batters, health mixes and pre-cubed tamarind, which will form Waycool’s gamut of last-mile cooking products: "Nearly 20 to 25 percent of our volumes will be accounted for by these products."
The company expects volume growth from its commodity segment, while it hopes the new gamut of value-added products will add to its margins. Given the prospective IPO it hopes to issue by 2025, Karthik said the special focus on better corporate governance is also on the cards: “We would like to list profitably, and we are well on the path to doing that."